ISLAMABAD - Power Ministry has decided in principle to introduce an upfront tariff for coal power projects while Private Power Infrastructure Board (PPIB) has proposed a uniform tariff up to Rs12.89 per unit for generating electricity with local coal in the country.
Sources well aware of the matter informed TheNation that PPIB subsidiary organization of Ministry of Water and Power widely believe that generation of electricity from coal would be helpful in controlling worsening power crisis in country. They said the PPIB has calculated that electric power generated with coal can be almost 40 percent cheaper than to the cost of electricity being generated with furnace oil.
Upon this, the PPIB has now proposed a tariff of Rs12.95 per unit for the 200 MW coal power projects through which electricity will be generated with local coal. However, for 200mw electric power generation with imported coal, a tariff of Rs11.29 per unit while for generating 1000mw of electricity with local coal, a tariff of Rs12.89 per unit and for generating electricity with the imported coal, a tariff of Rs10.97 per unit have been proposed till this effect. It is also learnt that levy of upfront tariff would be till 2014 for those projects qualifying financial close. Further, Nepra will conduct hearing on the plea of PPIB on 8th May for final approval of the upfront tariff for coal power projects in the country.
Sources in Nepra while confirming the information said that National Electric Power Regulatory Authority (Nepra) keeping in view the current power crisis in the country, high cost of generating electricity from the oil and decreasing gas availability to the power sector, has decided to play a pro-active role in the development of coal power projects, which are likely to have comparative lower tariffs because coal is abundantly available both locally as well as internationally.
Accordingly on the basis of proposal for upfront tariff submitted by the PPIB and the information otherwise available, Nepra in exercise of its powers under rule 3 (1) of the Nepra (tariff standard and procedure) Rules, 1998 read with regulation 3 of the Nepra upfront (Approval & Procedure) Regulations, 2011, has decided to develop, determine and approve the upfront tariff for generation of electricity from coal in the country.